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David Roodman's Microfinance Open Book Blog

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A letter just posted on the blog of the Center for Financial Inclusion opens thusly:

This may surprise you. As the CEOs of eight global microfinance organizations, we largely agree with the substance of David Roodman’s March 8 op-ed Microcredit doesn’t end poverty, despite all the hype. The headline, however, is just silly.

The hype is long over. The industry agrees that microcredit is not a “silver bullet” to end all poverty, even though it can and has helped many people build better livelihoods.

The letter goes on to say things that seem eminently reasonable to me.

But about that headline. Certainly, I knowingly compromised in writing for the Post, presenting my nuanced view while accepting that they'd go for a more provocative headline. (In fact, it wasn't much of a compromise because they were entirely understanding when I, for example, reversed some of their edits for the sake of responsible nuance.)

I'd say this in defense of the Post. They deserve some presumption that they understand their audience better than microfinance CEOs do. Perhaps for most Post readers, the conclusion that microcredit does not demonstrably, reliably reduce poverty among clients is news. Microfinance groups may have moved on, in what they do and how they talk about it, but, as the continuing growth in the popularity of Kiva suggests, the public may be well behind. Their understanding may be based on the more upbeat things these microfinance groups were saying not so long ago. Personally, though this was probably not the headline I would have written, I felt it best to defer to the Post's judgment of its readership.

At any rate, I understand why the microfinance CEOs wanted to clarify what their groups are doing.

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CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.